I am 22 years old. I plan to invest Rs1,000 each in HDFC Equity, DSP BlackRock Top 100, HDFC Top 200 and Franklin India Bluechip fund per month, for 10 years. Are these schemes okay?
You have an all-equity portfolio made up of very good funds that cover a good breadth of the market. This is an excellent start to building an investment portfolio. What you need to know is when to look at your portfolio and when not to look. Please don’t pay attention to the market swings on a daily, weekly, or even monthly basis. However, once a year, regardless of market conditions, review your portfolio to see which funds are doing well (relative to the market performance) and readjust your scheme selections accordingly.
Also, as your earning/saving capacity goes up, add to your portfolio of funds. When you have another Rs1,000 to invest, you can consider adding a good mid-cap fund like HDFC Mid-cap Opportunities fund.
I am 28 years old. I invest in DSP BlackRock Opportunities Fund (G), SBI PSU, Reliance Gold (Rs1,000 each) since the past four months. I want to invest Rs7,000 per month in HDFC Top 200, HDFC Equity, Franklin India Blue Chip (G), DSP BlackRock Top 100 (G), HDFC Midcap Opportunities Fund, Franklin Templeton Dynamic P/E fund. I want to invest for 15 years and build a corpus of Rs25 lakh for my son’s education and daughter’s marriage. Although the funds have strong fundamentals but they are not performing since the past one year and three-year annual returns are also low. Will I be able to achieve the target? Is my choice of funds right?
Given your monthly investment amount, achieving your financial goal of Rs25 lakh in 15 years should not be a problem. Even assuming a relatively modest 10% annual return over this period, an investment of about Rs6,000 a month will get you to your target. You have a pretty good set of funds in your portfolio, especially the ones that you are planning to start investments in.
However, considering the fact that you are worried about the short-term (past one year) performance of the schemes worries me a bit. Investing over a period of 15 years takes discipline to stick to the plan of constant investment and periodic reviews.
If you are concerned about the volatility in the market, you may want to reduce the risk quotient in your portfolio. You can add hybrid funds such as HDFC Prudence or DSP Blackrock Balanced to your portfolio in lieu of some of the multi-cap or mid-cap funds. That will make your portfolio less prone to dramatic movements and may increase the chances of your keeping the investments going.
Srikanth Meenakshi, Founder and director, FundsIndia.com
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